Logistics sector a key catalyst of the booming e-commerce market

DUBAI: The UAE e-commerce market is poised to grow to US$17.8 billion in 2020, and the logistics providers they choose will play a key role in the exponential growth of online shopping, according to industry specialists.

Average annual online spend per-capita in the
UAE is around US$300, significantly higher than Saudi Arabia at US$90 and France
at US$94, according to UK-based consultancy firm Business Monitor International
(BMI). Online shopping is growing faster in the UAE than other countries. The
UAE currently ranks 33rd in the world, in terms of the size of its e-commerce
market.

The UAE is also a leading emerging market
player in the logistics industry as the country ranks first in the Gulf region
and third globally after China and India, according to the latest Emerging
Markets Logistics Index.

“The aggressive growth of the e-commerce
market in the UAE increases demand for professionally qualified logistics
service providers to meet the logistics requirements of their customers,” Gulf
Pinnacle Logistics Chairman Shailesh Dash said.

More than 80 per cent of UAE’s 8.2 million
internet users make purchases online, according to the annual report of Admitad
– a global affiliate network. With the rise of digital retail platforms, such
as Namshi, Noon, Ounass, Amazon.ae (formerly Souq.com) and several others, the
UAE’s e-commerce market is estimated to be worth an astounding $27.1 billion by
the year 2022, says Admitad report.

Once an online order is placed, the customer
becomes eager to receive the shipment and a sophisticated logistics and
delivery system plays a key role to provide timely and efficient delivery of
goods or products. Once a customer is satisfied with a combination of metrics
such as the quality of the product, its price point, speed of delivery and ease
of payment, he/she engages in more
frequent purchase orders and becomes a regular and retained customer fueling
the growth of e-commerce players.

Many e-commerce giants have realized and tied
the importance of a reliable, efficient and timely logistics system to their
own success. Hence, those e-commerce giants who can afford vertical integration,
started to either acquire state-of-the-art logistics providers or build a
logistics arm internally to ensure a reliable, speedy, on-time, delivery
services to their clients. For example, Amazon in the US, have established
their own warehouses, and plane delivery network (Amazon Air) and are even
purchasing abandoned malls in densely populated areas which are treated as
fulfilment centres to reduce delivery times.

In contrast to the very large players who have a significant volume of shipments to be able to support an in-house delivery and logistics network, medium and small-sized e-commerce players still seek an external vendor like Century Express, which specializes in express e-commerce delivery and is highly regarded by its corporate clients. News Desk